Moly minesdec12cp


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Moly minesdec12cp

  1. 1. Quarterly Activities Report December 2012Moly Mines Limited HIGHLIGHTS (all amounts are in A$ unless otherwise stated)Mine Operator & Developer OperationsSpinifex Ridge, Western Australia  New mine plan  Production and sales target at 1 million tonnes for calendar year 2013  Updated Ore Reserve Estimate completedASX TSX Code: MOL Mine Performance (unaudited)Principal & Registered Office46-50 Kings Park Road  185,315 wet ore tonnes mined for the Quarter, down 36% onWest Perth, WA 6005PO Box 8215Subiaco East, WA 6008 previous QuarterT : +61 8 9429 3300F : +61 8 9429 3399  261,893 wet ore tonnes shipped (sold) for the Quarter, up 44%W: www.molymines.comE :  59.0% Fe average grade of ore shippedIssued CapitalOrdinary Shares: 384,893,989  Gross sales revenue:Warrants / Options: 34,010,491  December Quarter: $23.4M, up 58% from September 2012Board of DirectorsMichael Braham - Chairman QuarterDavid CraigDavid NixonLiu Han  Realised CFR price of $92.9/t, up 10% from September 2012Andy ZhmurovskyKang Huan Jun QuarterNelson Chen – Alternate for Liu HanPeter Mansell – Alternate for Kang  Operating cash costs / tonne of ore shipped: $68.9/tHuan JunOfficers  Mine EBITDA:Collis Thorp – Acting CEOJohn McEvoy - CFO  December Quarter: $0.9MMartijn Bosboom - Company Secretary  Ore stocks on hand: 124,000 tonnesInvestor RelationsNatalie Frame (Canada): +1 416 777 1801 Corporate & Finance (unaudited)Share RegisterComputershare  Cash on hand: $41.1M, down $13.4M (mainly due to revenue fromLevel 2 / 45 St Georges TerracePerth, WA, 6000 December 2012’s iron ore shipment not being received until JanuaryT: +61 8 9323 2000F: +61 8 9323 2033 2013)1500 University St, Suite 700Montreal, Quebec H3A 358T: +514 982 7888  Short term iron ore hedging initiated to take advantage of recentF: +514 982 7635 price 1 ASX TSX : MOL ABN : 32 103 295 521
  2. 2. Quarterly Activities Report December 2012 Corporate  Staff and cost reductions implemented  Mergers and acquisitions strategy focused on near term production assets that can be financed independently from Hanlong Exploration  No exploration activity to report Summary At Quarter end Moly Mines Limited (Moly Mines or Company) had approximately $64.2 million of net current assets on its balance sheet. As reported previously, the Company initiated a scheduling and production review in September 2012. Since then, iron ore prices experienced a remarkable recovery which will have a positive impact on the Company’s financial position. The review has resulted in a new mine plan based on cost and strip ratio optimisation targeting nominally 1 million tonnes for calendar year 2013. Discretionary mine capital expenditure will remain under constant review. As announced previously, the Board has reviewed its merger and acquisition strategy. The short term focus is on near term production assets which can be financed and developed independently from its major shareholder Hanlong Mining Investment Pty Ltd part of the Sichuan Hanlong Group (Hanlong). Hanlong has advised it will be in a position to financially support an acquisition of project development by the Company from the second half of 2013 and in that context the Company will consider longer term and possibly larger scale opportunities. The Company continues to consider the potential to divest the iron ore mine. Operations Product sales for the Quarter totalled 261,893 wet metric tonnes from 3 vessels, up 44.7% on the September 2012 Quarter. Free-on-board (FOB) operating costs (unaudited) for the Quarter averaged $68.9/t ore shipped. Iron Ore Mine March June September December Total Statistics 2012 2012 2012 2012 2012 (unaudited) Quarter Quarter Quarter Quarter Year Ore mined – tonnes 222,354 220,824 287,735 185,315 916,228 Ore crushed – tonnes 254,937 270,461 252,790 220,768 998,956 Ore shipped (sold) - 261,457 270,995 182,225 261,893 976,570 tonnes Average Fe Grade 58.0% 59.1% 58.6% 59.0% 58.7% shipped Number of shipments 3 3 2 3 112 ASX TSX : MOL ABN : 32 103 295 521
  3. 3. Quarterly Activities Report December 2012 (1) FOB cost per tonne of 65.7 63.3 57.1 68.9 64.3 ore shipped - A$/t (1) Costs exclude freight, commissions and government royalties and corporate head office overhead. Ore stocks on hand at Quarter end totalled 123,876 tonnes (excluding low grade stocks). Since the commencement of operations, approximately 590,000 tonnes of lower grade iron ore (grading 50%-55% iron) have been stockpiled for future blending and processing. These stocks have not been valued for the purposes of the Company’s financial statements. The iron ore off-take agreement (Off-take Agreement) between Moly Metals Australia Pty Ltd and Hanlong Metals Limited (Hanlong Metals) includes a clause that either party may trigger a “negotiation in good faith” process should that party believe that the pricing mechanism under the Off-take Agreement is no longer appropriate. The process has been triggered and negotiations have started. It is expected these negotiations will lead to a revised mechanism during the March 2013 quarter. Pending these negotiations, shipments are being priced on a “shipment by shipment” basis. Spinifex Ridge Molybdenum / Copper Project The development of the Spinifex Ridge Molybdenum / Copper Project was deferred in December 2011 and will remain on care and maintenance with tenement and permitting obligations being met. Corporate and Finance Staff reductions As announced previously, the Company has implemented a cost and staff reduction program at a corporate level which is forecast to reduce corporate costs to about $6.1 million for calendar year 2013. Hedging Program In January 2013, the Company took advantage of stronger iron ore prices to enter into the following iron ore hedges:  US$135/tonne flat forward on 160,000 tonnes of 62% iron ore for the period February to September 2013 (equivalent to 20,000 tonnes per month)  Put at US$120/tonne and call at US$146/tonne on 160,000 tonnes of 62% iron ore for the period February to September 2013 (equivalent to 20,000 tonnes per month) Securities on Issue On 31 October 2012 13,828,334 institutional warrants with an exercise price of A$ 1.06 or C$ 1.06 expired. During the Quarter 4,833,337 employee options were cancelled by reason of resignation or termination of employment.3 ASX TSX : MOL ABN : 32 103 295 521
  4. 4. Quarterly Activities Report December 2012 Balance 31 Dec 2012 Ordinary shares 384,893,989 Options - EIG Warrants 4,832,157 - Employee options 10,516,663 Total 15,348,820 Diluted Total 400,242,809 New Company Secretary appointed The Company’s General Counsel, Martijn Bosboom, was appointed Company Secretary replacing Andrew Worland who ceased employment with the Company on 30 November 2012. Finance - unaudited Gross sales revenue earned on the three shipments for the December 2012 Quarter averaged a price of A$92.9/t (dry metric tonnes) and totalled $23.4 million. Net revenue, (being gross revenue less freight, commissions and royalties), earned for the Quarter was $18.9 million. Mine earnings before interest, depreciation and amortization charges for the Quarter totalled $0.9 million.4 ASX TSX : MOL ABN : 32 103 295 521
  5. 5. Quarterly Activities Report December 2012 Iron Ore Mine March June September December Total Financials 2012 2012 2012 2012 2012 (unaudited) Quarter Quarter Quarter Quarter Year Sales price achieved A$/dmt 110.4 110.8 84.6 92.9 100.9 Gross sales revenue A$’000 27,107 28,631 14,833 23,397 93,968 Net sales revenue A$’000 21,441 22,985 11,570 18,904 74,900 EBITDA A$’000 4,276 5,833 1,164 880 12,153 Cash receipts from A$’000 26,115 27,055 26,740 13,719 93,629 sales A reconciliation of Spinifex Ridge Iron Ore Mine earnings before interest, depreciation and amortization, corporate expenditure and net corporate cashflows for the Quarter ended 31 December 2012 is shown below – A$’M (unaudited): 60.0 0.9 1.6 2.8 1.8 8.1 50.0 40.0 30.0 54.5 20.0 41.1 10.0 0.05 ASX TSX : MOL ABN : 32 103 295 521
  6. 6. Quarterly Activities Report December 2012 Spinifex Ridge Iron Ore Mine In November 2012 the Company released an updated insitu Ore Reserve Estimate based on the Ore Resource Estimate as reported in the June 2012 Quarterly Activities Report. The Ore Reserve Estimate takes into account depletion through mining as of 31 May 2012 but does not include port or mine site stockpiles. For further detail, the Company refers to the NI43-101 Technical Reserve Update that was announced on 3 December 2012. Ore Reserve Estimate – 30 November 2012 JORC Category Volume Tonnes Fe % Al203% SiO2% P% LOI% S% kBCM kTProven - - - - - - -Probable 1,018 3,098 60.02 1.08 7.6 0.13 4.0 0.00715Total 1,018 3,098 60.02 1.08 7.6 0.13 4.0 0.00715 “The scientific and technical information in this report that relates to the in-situ Mineral Reserve estimates for the Spinifex Ridge Iron Ore Deposit is based on information compiled by Mr Benjamin Cairns, who is a consultant working for Westoria Capital Pty Ltd. Mr Cairns is a Member of the Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ and to qualify as a “Qualified Person” as defined in National Instrument 43 -101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) of the Canadian Securities Administrators. Mr Cairns has reviewed and approved the disclosure of the relevant scientific or technical information in the form and context to which they appear in this report that relates to the Spinifex Ridge Iron Ore Mineral Reserve estimate. Mr Cairns consents to the inclusion in the report of the matters based on his information in the form and context in which it appears”. 6 ASX TSX : MOL ABN : 32 103 295 521